Spotlight on the Timing of Treasury Shorts

The lead-in chart, also posted yesterday, shows the progression of treasury shorts. Let's now look at yields and timing.

Timing ​

September 5, 2017 with the 10-year yield at 2.04%, was an excellent time to short 10-year treasuries. The number of speculative net short contracts was only 62,634.

On January 2, the speculative net short position rose to 292,210 contracts with the yield up to 2.45%.

On April 17, at a yield of 2.88%, there were 543,822 net short contracts.

On July 24, with the yield barely rising to 2.97%, there were 698,504 net shorts contracts. That's an increase of 154,682 with the yield essentially moving sideways.

Larger Picture

The above just describes changes in net positioning. It's highly likely some of those who shorted early on have taken profits while others added to shorts and still others took positions for the first time.

The number of short contracts is a whopping 1,557,271 contracts.

The number of long speculative contracts is 858,767 so there may be a pile of hurting longs ready to throw in the towel on a move higher in yields as well. I suppose it would be fitting if one final blast higher in yields shook out the longs right before a reversal.

Congrats to those who shorted early and got out.

It's the short latecomers and those pressing shorts after this rally in yields that will eventually blow up. Some longs may also be on the edge right now.

Mike "Mish" Shedlock

Comments
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gliderdude
gliderdude

Mish, I have a serious question for you. I have seen numerous articles on your site promoting historically high short positions with opportunities for longs to get in an unwinding of those positions. That is my usual take on high shorting as well. However, you routinely hop on the bandwagon of short media blitzkriegs on massively shorted Tesla which IMO are orchestrated by some powerful media connected interests. Those powerful interests are likely shorters but their media onslaughts surely do not coincide with their own shorting activity. Obviously they front run the FUD propaganda and likely rather use it to time covering their shorts. Unless one is naive enough to believe those guys are telling you what they are doing ahead of time, they are playing your readers. As such it is a disservice to your audience and totally counter to your view on short interest to steer your viewers in the manner you have with those articles. Please respond on what drives your timing of your negative Tesla articles. Are there people you owe that call you up with strongly worded requests? or some sort of quid pro quo. Why do you seem to follow these big surges in short staged media, yet discredit that very thing when it comes to other markets?